Microsoft Suspends Cloud, AI Services to Israel Defense

Microsoft has suspended access to specific cloud storage and services for the Israeli Ministry of Defence (IMOD). The decision follows an internal investigation that confirmed the technology’s use for mass surveillance of the Palestinian civilian population, an action that violates the company's ethical use policies.

"We have informed IMOD of the decision to suspend and disable certain subscriptions and services, including the use of cloud storage and AI technologies," says Brad Smith, President and Vice Chair, Microsoft. The justification for this action is based on two key principles: the refusal to facilitate mass surveillance and the commitment to protecting user privacy.

The service suspension is the culmination of events initiated by an August 2025 report from British news outlet The Guardian, which first conducted the original investigation. The report alleged that an Israeli Defence Forces unit used Microsoft Azure infrastructure to store phone call data obtained through large-scale surveillance systems targeting civilians in Palestine. This report prompted Microsoft to initiate an internal review to verify compliance with its contractual and acceptable use policies.

Simultaneously, the company faced significant internal pressure from its own employees. Workers have questioned contracts with the Israeli government through open letters and internal campaigns. They have demanded greater transparency about the use of Microsoft technology in conflict zones and the cancellation of agreements that could contribute to human rights violations. This activism is part of a growing trend within the technology sector, where employees at other corporations like Google and Amazon have voiced opposition to projects with military applications.

According to Smith, Microsoft’s investigation was conducted without accessing the client's hosted content, thereby respecting confidentiality agreements. Instead, the analysis focused on commercial, financial, and internal communication records. 

The suspension's scope is limited. Smith says that this measure does not affect Microsoft's cybersecurity collaboration with Israel. It also does not interfere with regional projects linked to the Abraham Accords, a pact mediated by the US in 2020 to normalize diplomatic and commercial relations between Israel, the United Arab Emirates, Bahrain, Sudan, and Morocco. This distinction highlights that Microsoft's action is a technical and targeted response to a specific policy violation, not a complete severance of business relations.

The company's investigation is ongoing. More information on the results is expected in the coming weeks.